Quick Answer: What Do FHA Home Inspectors Look For?

Is an FHA loan bad for the seller?

When an FHA home loan is being used, the appraiser must determine the market value of the home being purchased.

This is another perceived disadvantage of FHA loans for sellers.

Some sellers try to avoid borrowers who use this mortgage program because they feel their homes will not pass the appraisal process..

Will my house pass FHA inspection?

For a Federal Housing Administration (FHA) loan to be approved, the home must pass an FHA inspection and appraisal. That means it must be worth the purchase price and have such basics as electricity, drinkable water, adequate heat, a stable roof, fire exits and more.

What is included in FHA home inspection?

What Does the Appraiser Look for? So, what does the FHA appraiser look for during this process? The primary areas of inspection are the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity, and crawl spaces (when present).

Do sellers have to pay closing costs on FHA loans?

FHA loans allow sellers to cover closing costs up to six percent of your purchase price. That can mean lender fees, property taxes, homeowners insurance, escrow fees, and title insurance.

How long does it take to close on a house with an FHA loan?

two to three monthsRecap: How long does it take for an FHA loan to close? Once you’ve found a home, made an offer, and signed a purchase agreement with the seller … the rest of the process might take two or three weeks on the short end, or two to three months on the long end.

What are red flags for underwriters?

Some of the potential red flags underwriters look for: Late payments on credit cards. Mortgage payment delinquencies. Foreclosures or property liens.

Can an appraiser require repairs?

Appraisers will flag any major issues regarding plumbing, electrical, and HVAC (heating, ventilation, and air conditioning). All systems should be in working condition, or you’ll likely need to repair them before a bank will secure the buyer’s loan.

What does a FHA loan appraiser look for?

What does the appraiser look for? An FHA appraiser will observe, analyze, and report on whether a property meets HUD’s “minimum property requirements” and in the case of new construction, the property must also meet “minimum property standards.”

How long does an FHA inspection take?

Another common question is: How long does the FHA home appraisal process take? In most cases, the appraisal can be completed within a matter of days. But this will depend on the appraiser’s workload, efficiency, and other factors. The property visit itself usually only takes a few hours.

What are the requirements for a house to be FHA approved?

FHA Loan RequirementsFICO® score at least 580 = 3.5% down payment.FICO® score between 500 and 579 = 10% down payment.MIP (Mortgage Insurance Premium ) is required.Debt-to-Income Ratio < 43%.The home must be the borrower's primary residence.Borrower must have steady income and proof of employment.

How much is an FHA inspection?

As a borrower, you’ll pay for the appraisal before closing on your loan. The cost of an appraisal isn’t set by the FHA, but the Federal Reserve estimates an appraisal costs between $300 to $700.

Are FHA appraisals more strict?

The FHA Appraisal To secure a mortgage, the property must meet FHA minimum standards and meet a fair market value. … As such, FHA appraisals are usually more strict than conventional appraisals. To qualify for an FHA loan, the appraisal must show: The roof is in good repair with no work needed for two years.

What disqualifies an FHA loan?

1. Credit score. According to the Department of Housing and Urban Development (HUD), you need a credit score of at least 500 to be eligible for an FHA loan. … But most want to see a credit score of 600 or higher. If you fall well below this range, you might be denied for an FHA loan.

How long does it take to get FHA appraisal results?

While shorter forms can be done in as little as six hours, depending on their workload and the complexity of the home, the appraiser should have the report completed in less than a week. Generally, from the time the lender orders it, you can expect to see an appraisal report anytime between two days and one week.

Why would FHA not approve a home?

If the appraisal “comes in low” (meaning the house appraises for less than the purchase price), then the FHA probably won’t approve the home for financing. Depending on the situation, the homeowner /seller might be willing to reduce the sale price to reflect the appraisal amount.

Who pays for FHA inspection?

Who pays for FHA appraisals? The buyer is responsible for the cost of the home appraisal. These costs typically vary by market and depend on the size, age and condition of the home. Generally speaking, they fall between $300 and $500, in most cases.

Does FHA allow you to pay off debt to qualify?

FHA and VA mortgage guidelines will allow a borrower to pay down their credit card balances to $0 and the underwriter will only count a $10/month minimum payment towards the borrower’s debt to income (DTI) ratio. … This is definitely good news for FHA and VA loans.

What are FHA required repairs?

FHA Repairs That Must be Completed Prior to Closing Peeling paint in homes built before 1978, which might be a lead hazard. Unpainted downspouts and broken rain gutters. Rotting outbuildings in need of demolition. Exterior doors that don’t properly open and close.